As online video matures, the large and unmeasured television campaign is losing its appeal. Here's how to take advantage of existing options without sacrificing potential reach or quality.
At a recent industry conference, I heard a media buyer ask, "Can video ad networks aggregate more low quality inventory to bring the price down for our CPM-sensitive clients?" Savvy marketing had apparently left the building. While decreasing the quality of inventory to bring down prices is possible and has occurred -- thanks to the proliferation on user-generated video and other high traffic, unedited sites -- this approach ignores some of the most important benefits of online video advertising.
The high-reach, low-cost video campaign is a legacy of the television advertising era. Fortunately, as online video advertising matures, the large and unmeasured television campaign is losing its appeal. That said, replacing these TV campaigns with similarly large and slightly measured online video campaigns is not the answer.
I won't argue that television advertising does not deliver value to advertisers. However, it's worth emphasizing some misconceptions about television advertising, particularly as it relates to online video advertising.
Savvy marketers should embrace the broad reach, targeting capabilities and measurability of online video advertising to overcome the shortcomings of television ads to truly achieve the best of both worlds.
Below are four myths and realities designed to demonstrate how marketers can take advantage of online video advertising options, without sacrificing potential reach or quality.
Myth: Television is more cost effective than video advertising.
There is a general industry misconception about the pricing of online video inventory when compared to television. Typically, critics compare untargeted 30-second television CPMs ($6 to $12) to targeted online 30-second pre-roll CPMs ($15 to $30).
Reality: Targeted demographic groups are cheaper and more effectively reached online.
The savvy marketer understands that targeted television CPMs for men 18 and older or women ages 25 to 54 are often priced around $18 to $35, while hard to reach television audiences such as 18 to 34-year-old men can be priced as high as $75. Targeted demographic groups are widely available online at CPMs under $25 and price is a major benefit of online video advertising that will only become more attractive as targeting capabilities become enhanced.
Myth: There is no effective way to replace diminishing television audiences.
Despite the undeniable reach of television, many audiences have simply vanished and can no longer be reached at significant scale. Teenagers, young men and women and daytime female audiences are simply doing other things (and often doing them online).
Reality: Online video is the most effective venue for audience replacement.
The savvy marketer leverages the combined reach and targeting capabilities of online video advertising to reach elusive, yet highly desirable, audiences. In aggregate, online video advertising should be a small percentage of overall ad spending, but for these audiences it should be a more significant piece of the media budget.
Myth: Impressions are a good measure of effectiveness.
If television campaign performance can be defined as "measurement by maybes," online video campaign performance should be defined as "measurement by metrics." However, many marketers are relying exclusively on the impression metric, which is not sufficient. The bottom line: not all impressions are created equally.
Reality: Impressions are only the beginning.
The savvy marketer realizes the importance of looking beyond the impressions and includes such factors as engagement, ad duration, cost-per-view, clickthrough rate, recall, brand lift and brand adjacency as key influencers of a campaign. Not surprisingly, in 2008 we will see budgets rapidly shifting to high quality, typically branded inventory that performs high on a range of brand metrics, and away from the "churn and burn" low quality video sites and networks.
Myth: Television offers a higher quality experience.
The high-definition revolution is beginning to take hold in the U.S. with household HDTV penetration above 30 percent.
Reality: PCs are more equipped to deliver high impact campaigns.
Unbeknownst to most media professionals, nearly 75 percent of the internet is already HD-ready with broadband connections and LCD monitors. The savvy marketer is beginning to take advantage of high quality online video formats (including HD) and understands that not all video experiences should cost the same. For content campaigns, such as movie trailers or video games, the highest quality available video formats should be used.
Television advertising was once hailed as the most effective way to reach a large and targeted audience. However, innovations in video advertising are maximizing results for savvy marketers and the brands they represent. By focusing on online videos strengths -- price, audience, performance and quality -- every dollar spent online will be maximized and clients will see much more success in the market.
Tod Sacerdoti is CEO, BrightRoll.